TALLAHASSEE | A number of unresolved problems haunting the state-backed Citizens
Property Insurance Corp. have left the state increasingly vulnerable to
catastrophe, the chairman of the Senate Banking and Insurance Committee said
Wednesday.

Sen. David Simmons, R-Maitland, said it's time to redefine the mission for
Citizens, created a decade ago as the insurer of last resort.

Citizens' instead has grown into the largest property insurer in Florida with
more than 1.3 million customers, roughly one-fourth of the total market in the
state. The company's growth has resulted in part from artificially low rates.

"We haven't solved the problem," Simmons said during a two-hour, late afternoon
hearing. "Any cataclysmic event would have cataclysmic results in Florida."

Virtually all Floridians carrying insurance, whether or not a Citizens'
customer, would be liable to make up any shortfall in the event of a
catastrophe. Any shortfall in the Florida Hurricane Catastrophe Fund, often
known as the CAT fund, would also be made up from emergency assessments.

Simmons said his committee staff will meet with their counterparts from the
House to draft a bill with the goal of finding some solutions.

"We need to make sure we're going to have a vibrant, private insurance market
here in Florida," said Simmons, noting that some of the previous decisions by
lawmakers have led to private insurers leaving Florida.

The committee heard a host of ideas on possible ways to reform Citizens.

Florida's insurance consumer advocate Robin Westcott told lawmakers that it's
critical for homeowners to strengthen their homes against storm damage to help
get a handle on the state's skyrocketing property insurance costs.

"Every major study or work group since Hurricane Andrew has emphasized
mitigation as the key to reducing our risk," Westcott said, adding that
mitigating the homes would reduce potential losses.

"It is up to the Florida Legislature," said Steve Pociask, president of the
American Consumer Institute Center for Citizen Research. "The manipulation of
insurance prices by regulation has led to a dysfunctional insurance market in
Florida."

David Christian of the Florida Chamber of Commerce told the panel that Florida
now has more than $2.5 trillion in total insured coastal property value

.

The committee, however, did not get into recent calls to increase the oversight
of the state-backed insurer after reports that some Citizens' employees racked
up excessive expenses in recent months.

A review by Florida's chief inspector general found more than 50 instances where
senior managers were reimbursed for meals in their own hometowns and that former
Citizens President Tom Grady took a limousine from his house to the airport.